House Approves GOP Tax Cut Plan
The House Republicans are pushing through their plan for tax cuts, two weeks after Governor Gretchen Whitmer unveiled her plans.
The current income tax rate sits at 4.25% and this plan would lower it to 3.9%.
The income exempted from taxes for those 62 and older would rise to $20,000 for individual filers and $40,000 for joint filers. An additional exemption would be applied specifically to retirement income – also at $20,000 for single filers and $40,000 for joint filers. The plan also provides more relief for families through a $500-per-child income tax credit.
On top of those moves, the bill package provides $1.5 billion in one-time funding from the state’s general fund surplus to reduce debt and improve the finances of public employee retirement systems. Most of the funding would go to pension plans for local governments and road commissions, with an additional $350 million to improve financing in the Michigan State Police retirement system.
Using state surplus dollars, the final House budget would also need to make other changes to the governor’s $74.1 billion dollar plan in order to afford it.
Opponents say the slight drop in income tax rate is not significant enough. Republicans say it is a start.
“There’s always more to be done, I’m always looking at ways of cutting taxes,” said Rep. Ken Borton, of Gaylord, “So yes, there probably is more to be done. This is a first good step. I think it’s a much better plan than what the governor recommended and, frankly, I like our plan better than what the Senate is recommending.”
The Senate has already agreed to the plan so it is expected to move to the Governor’s desk swiftly.